Thursday, October 21, 2010

Empirical Case against Stimulus

The interesting thing about this debate--and indeed all debates recently--is that two sides can be facing off against each other in what seems like an everlasting shouting match; two opponents ardently and consistently square off against each other in seemingly perennial disagreement.

For example, today on Hardball with Chris Matthews Pennsylvania Governor Ed Rendell, will shout "the stimulus is working"(to be fair, Rendell is a very nice fellow, and he speaks enthusiastically and passionately, although mistakenly, about the stimulus. He was not, as I sarcastically put it, "shouting"); on the other side a Republican will shout "the stimulus is not working."

Both parties usually go on to give support for their arguments, as Rendell does within the first 30 seconds of the above video.

And while a Republican--or any third or fourth party--is no where to be found but in the audience, we can imagine the argument they will give: the stimulus has yet to bring unemployment down; they just increased the federal deficit, etc.

Which one is right? They are two contradictory claims.

The reason of a post of this nature is to (1) ask why are people coming up with different conclusions with the same data and (2) how are people reasoning to come to these conclusions--if there is any difference between the two questions.

In a recent essay, Robert P. Murphy takes on Paul Krugman. He almost sounds--dare I say it--Republican. Whatever he sounds like, he speaks like a true free-market economist (or "Anti-Keynesian"):

Do you notice the pattern? The anti-Keynesians point to actual success stories as evidence of the potency of their policies. The Keynesians, in contrast, point to awful economies and claim that they'd be even worse were it not for the Keynesian "medicine."

Ok, so this isn't my best post. It's 1:28 AM and I merely wrote all that because I wanted you to read the rest of Murphy's essay. It's much more well written than this post. Ok, ok, ok. So all I really wanted you to do is see how people reason. (I know, why didn't I just say that in the first place.)

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